Second Home
Second Home Ownership
A few decades ago, only wealthy families owned more than one automobile. Today, owning just one car is a rarity. Over the thirty years, owning a second home may be as common as owning a second car. Already, 6.4 million homeownners 6% own a second home and it is predicted that 10 million people will own a second home by 2010. A ‘second home’ refers to private ownership of a residence other than one’s primary residence. Depending on their purpose, second homes are sometimes called cottages, vacation homes, or secondary residences.
Demographics
Where as second homes were once only owned by the top of the upper class, they are now becoming more common among a more varied demographic. Baby Boomers are increasingly becoming an active part in today’s real estate market; they are the single largest group of homeowners. U.S. Census Bureau predicts second home purchases for boomers to reach 6.4 million units by 2010, up from 5.5 million units purchased in the 1990's. These buyers usually purchase along the Sunbelt because of the temperate climate. Although the majority of second home buyers are baby boomers, younger middle class buyers are also entering the second home market. Typically, these buyers purchase near secluded water shores and away from large cities. Ninety percent of the buyers are married, and then single men, single women, and unmarried couples. Most second home owners have their primary residence in Wisconsin, Pennsylvania, Florida, New York, and California. On average, most spend 1 to 3 months in their second home, although there are some that spend as much as 6 months there.
Why are people buying second homes?
From an economic standpoint, many buyers (especially baby boomers) purchase a second home as an investment. Homes bought in popular tourist regions can be incredibly lucrative because of the willingness of tourists to pay high rent. Some seasonal travelers do not want to buy a permanent second residence. Instead, they rent a home where ever they travel to that year. Most second homes, however, are purchased for personal reasons. In some cases owners use their second home as a sort of refuge to temporarily escape their urban environment. These city dwellers look to their second home near an ocean, in the countryside, or on a golf course for relaxation and ‘fresh air’. In these instances, owners are typically young professionals searching for nature’s beauty to refresh their spirit that has been worn down by the stresses of city life. These vacation homes often become the owner’s primary residence after retirement. Many retirees whose primary residence is still in the northern United States use their secondary residence to escape the harsh winters. These people who migrate to warm weather during winter are often referred to as “snowbirds” because of the way they seem to ‘flock’ to the south. Winters in the southern states are very mild in comparison with those of the north, making a secondary residence in a Sunbelt state very appealing. Many snowbirds invest in a house within a golf course community. Here, they can continue to enjoy the country club lifestyle they live up north while still being able to play golf year round. Also, in some instances, the reverse effect takes place. In areas where summers are intense, residents migrate to northern states where summers are milder. Advancements in technology also have some impact on why people are buying second homes. Electronic mail, global cellular phone connections, and improved telecommunication, allow employees (especially businessmen) to maintain contact with their employer while on vacation. In addition, home ownership, the core of the American Dream, has been encouraged by the federal government through tax exemptions and low interest rates. Steady low mortgage rates are now allowing more people to finance two homes.
Alternatives
Timeshares have always been an alternative to owning a second home. Those looking for something larger than a timeshare often rent a home. But perhaps the best alternative to owning a second home is using someone else’s, FOR FREE! The newest phenomenon in the traveling industry is something called Hospitality Services. The housing industry offers something similar called “Holiday Home Exchange”. You stay in someone’s house while they stay in yours. After creating a profile on the website, you are able to exchange homes with people across the world.
